Investec upgrades Diageo to 'buy' from 'hold'

6th Aug 2015 10:41

(ShareCast News) - Analysts at Investec upped their rating for Diageo to 'buy' from 'hold', and said a "change story" was underway.Investec raised its price target for the stock to 2070p from 1860p.In a note to investors, Investec said drinks maker Diageo was at an inflection point, and was in a good place to capture "premiumising" trends.Investec raised its group organic sales growth forecasts from financial year 2017 to 5.8% from 5.1%.Analysts said Diageo just needed to market better to the millennial, and an overhaul of its approach should reinvigorate share growth.Investec said the company had room to growth in the North American market."While we are certainly encouraged by recent signs of stabilisation in Diageo's emerging market businesses, the crux of our more bullish stance is the potential for improvement within its key US spirits business," analysts said.Despite press reports of bid interest from Brazilian firm 3G capital, Investec said it was skeptical Diageo was a legitimate target.Shares in Diageo were unchanged at 0.22% to 1,825p at 1139 BST.